tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, August 2nd, 6:57PM

Insurance

rss
Latest Headlines

Churn debate: Reduce conflicts

One insurance company that is part of the FMA’s investigation into churn will tell a very different story all its competitors.

Friday, July 17th 2015, 11:03AM 1 Comment

Pinnancle Life chief executive Michelle van Gaalen says it is one of the companies caught up in the FMA’s data trawl exercise around churn, but it’s not an issue for the company.

Pinnacle runs a direct, online distribution model and it does have issues with churn. While the bulk of its business is online direct to consumers it does have relationships with 17 firms of financial advisers.

Van Gaalen says Pinnacle Life has one of the best persistency rates in the market and doesn’t see a lot of churn. While she wouldn’t disclose the rate it is mentioned as a positive factor in AM Best’s rating report.

“The (bb+) rating affirmations reflect Pinnacle Life's low product risk profile, direct distribution capabilities and a lapse ratio consistently below the market average,” AM Best says.

While price plays a role in persistency, van Gaalen says other factors come into play too such as service and value.

“I don’t think it’s price on its own. Customers are aware of what their needs are.”

She says it’s fair to ask the question is churn driven by commission, but she doesn’t know the answer.

“It would be fair to say there’s a degree of churn in the market, but is it natural or industry driven?”

She agrees with what John Trowbridge said in his report that if conflict is reduced “then you can ensure churn is natural”.

One of the key things that needs to happen is to reduce conflicts; then any churn would be at what she calls a “natural rate”.

But she says there is a “whole frame work of change” that needs to take place in the life insurance area and this includes life companies and advisers making change.

She says if this reduced costs then “you’d hope this that this was passed onto consumers.”

Tags: Churn Pinnacle Life

« Trail commission rules blamed for churn[Opinion] Risk commission future not all gloom and doom »

Special Offers

Comments from our readers

On 20 July 2015 at 1:15 pm LNF said:
Pinnacle's whole business model was replacement business at 80% of the premium, AND acceptance without underwriting - as a result, the policy holder was safe and definitely benefited with the adviser receiving 70% commission and no trail. I don't know what the rules are now, but NO churn is acceptable unless there is a guarantee that the policy holder is not compromised.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Flood claims cost almost $45 million
Insurance customers in the Canterbury region lodged 3,538 claims costing over $43.8 million in losses following the May 29 - June 1 floods according to provisional figures released by the Insurance Council of New Zealand (ICNZ).

AIA Vitality partners with Countdown and New Balance
AIA NZ has announced further enhancements to AIA Vitality in the lead up to the second anniversary of its flagship health and wellbeing programme in New Zealand.

ICNZ launches te reo Maori title
The Insurance Council of New Zealand has embraced one of the country's official languages after launching its te reo Maori name - Te Kāhui Inihua o Aotearoa.

EQC offloads disaster claim management to Kiwi insurers
From the end of June, New Zealanders will have a single point of contact for natural disaster claims with the EQC handing over management of claims to eight local insurers.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com
x